Is Lease-to-Own Financing Right for Your Business?
When customers with less-than-ideal credit need tires, lease-to-own financing can relieve some of the pressure. Instead of paying for their purchase all at once, your customers can make payments over time.
About a third of U.S. consumers have a subprime credit score, according to Experian. Don’t overlook these potential customers who may be leaving your store empty-handed.
Offering lease-to-own financing helps more customers get the tires and rims they need now. And that can mean more sales for your shop. If you’re considering this important financing option for your business, here are four questions to ask.
What Is Lease-to-Own Financing?
A lease-to-own option is not credit or a loan. Instead, a lease-to-own finance company, such as Snap Finance, purchases the merchandise from the retailer, and then leases the merchandise to the customer. The customer takes the merchandise home and makes lease payments over time until they’ve made the payments necessary to obtain ownership.
What’s in it for your business? Offering lease-to-own financing can help maximize sales, drive traffic to your store, and increase customer retention. Plus, there’s no risk for retailers like you. If a customer defaults, the lease-to-own provider takes the hit – not your business.
How Do I Choose a Lease-to-Own Financing Provider?
When choosing a lease-to-own financing provider for your automotive business, make sure the provider’s options line up well with your customer base. Lease-to-own financing options are generally for midsize purchases – up to $3,000, for example. The terms of the agreement – how long customers have to pay off the lease – may vary from one provider to the next.
Providers may offer options to complete the terms of a lease early, which can lessen the cost of ownership for your customer. Snap Finance, for example, offers early buyout options to reduce the overall cost of lease.
If you have online and brick-and-mortar locations, you’ll want to also consider a provider’s e-commerce capabilities. Ensure the provider makes it easy to integrate and implement its capabilities with your site.
And finally, look for a provider that has experience working with businesses that are similar in size, sales volume, and product mix to yours. Ask about available merchant support when there are questions and marketing resources that help drive traffic to your store. For example, through its Snap EDGE program and store locator, Snap Finance guides customers who are approved and ready to transact to its partners. The program can help your business build incremental sales and encourage customers to come back to your store to complete additional transactions.
How Will Lease-to-Own Financing Affect My Bottom Line?
Lease-to-own financing provides payment options to a relatively untapped customer base, which can have a significant impact on your sales. According to Bankrate, only about 40% of U.S. consumers could comfortably afford an unexpected $1,000 expense. Because lease-to-own financing usually considers
factors other than scores from major credit bureaus, more people will likely be able to make a purchase at your store.
More financing options means more opportunities to close sales and increase customer loyalty. With lease-to-own financing, your customers gain additional purchasing power – and you’re likely to see gains in your average order value (AOV), according to a 2021 consumer survey from PYMNTS. As a leading provider of lease-to-own financing, Snap Finance works to make the process as transparent and efficient as possible for consumers.
Offering easy access to financing options at the point of purchase means more customers can get the tires and rims they want and need from you instead of your competitor. By providing help to your customers when they need it most, you can strengthen relationships, build loyalty, and increase opportunities for repeat business.
A Competitive Edge
Offering lease-to-own financing opens the door to higher sales, stronger customer relationships, and improved bottom-line results for your business. If you’re ready to make this important financing option available to your customers, visit Snap Finance. Learn how our lease-to-own financing can work for you.
The advertised service is a lease-to-own agreement provided by Snap RTO LLC. Lease-to-own financing is not available to residents of Minnesota, New Jersey and Wisconsin.
While no credit history is required, Snap obtains information from consumer reporting agencies in connection with the lease-to-own application. Not all applicants are approved.
This article is part of the SNAP! Finance Corner series. As more articles are released, they can be found below: